Sagility Ltd — Q4 FY26

Sagility Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=_oX4hc32QF0 Published: 1 day ago

0:02 2 seconds Good evening everyone and welcome to the Q4 FI26 earnings webinar of Saggility Limited. This is Sadhhat Rangar from CDR 0:11 11 seconds India and I shall be your host for today. As a reminder, all attendee lines will be in the listenonly mode. There shall be an opportunity for you to ask 0:19 19 seconds questions after the presentation concludes. Please note that this webinar is being recorded. To introduce the management, we have with us today Mr. 0:28 28 seconds Romesh Popalan, managing director and group CEO, Mr. Shri Nas Matapali, executive vice president and group chief 0:37 37 seconds financial officer. Before we commence, I would like to state that some statements made on today's discussion could be forward-looking in nature and may involve certain uncertainties and risks. 0:48 48 seconds A detailed statement in this regard is available in the quarter 4 and FI26 results presentation that has been uploaded to the stock exchanges. I would now like to hand over the forum to Mr. 0:58 58 seconds Romesh Gopalan to begin the proceedings of this webinar. Over to you. 1:04 1 minute, 4 seconds Thank you Sudat. Good evening everyone and thank you for joining joining us on our Q4 and FI26 earnings call. 1:13 1 minute, 13 seconds FI26 has been an exceptional year for agility. We delivered high growth and profitability in a very challenging environment. 1:22 1 minute, 22 seconds As we discussed with all of you on the investor day in March, healthcare payers are facing significant profitability pressures because of regulatory changes, 1:31 1 minute, 31 seconds lower than expected reimbursements and increasing medical utilization. 1:36 1 minute, 36 seconds In this environment of intense cost pressures, clients are more receptive to partners like Saggility who not just play a support role but can help 1:45 1 minute, 45 seconds transform their operations and deliver better business outcomes at a lower cost. 1:50 1 minute, 50 seconds Given our domain expertise, the breadth of our service portfolio and the trusted relationship we have with our clients, we are able to play a large part in the 1:58 1 minute, 58 seconds transformation journey through AI and techled initiatives. 2:03 2 minutes, 3 seconds We saw steady growth through the year and a better than expected Q3 and Q4 which are the peak seasons for us on 2:10 2 minutes, 10 seconds account of a and open enrollment. We saw higher volumes across all of our practice areas and equally important, our execution was very strong. 2:20 2 minutes, 20 seconds To put the impact of a and open enrollment in context, our seasonal revenues accounted for 6% of FI26 2:27 2 minutes, 27 seconds revenues versus 3% in FI25 with an equal split across Q3 and Q4. 2:36 2 minutes, 36 seconds Our strategy of expanding white spaces within existing accounts continues to serve us well. Our top five grew year by 2:43 2 minutes, 43 seconds 11.7% in FI26. Our focus on mid and small market is also beginning to show results. We added 17 new clients in FI26 2:53 2 minutes, 53 seconds and some of them were sizable regional plans and blues which sets us up well for growth in the coming years. 3:01 3 minutes, 1 second As we mentioned in the on the investor day, our synchronous suite of solutions which are outcome focused and transformational managed service deals 3:08 3 minutes, 8 seconds are getting the attention of many of our clients and prospects. 3:12 3 minutes, 12 seconds The addition of broadpath has further strengthened our ability to support seasonal and member-f facing operations particularly during peak enrollment cycles. 3:22 3 minutes, 22 seconds Overall this reinforces our position as a healthcare focused operations partner that com combines domain expertise 3:29 3 minutes, 29 seconds technology and execution at scale. Let me now build on that with our performance for the quarter and for the year. We can move to the next slide. 3:40 3 minutes, 40 seconds Q4 marked a strong and disciplined close to FI26 building on the momentum we saw through the year. 3:48 3 minutes, 48 seconds For the quarter, revenue stood at 20,243 million rupees or 222.1 million US 3:57 3 minutes, 57 seconds representing 29.1% year-on-year growth in rupee terms and 22.2% in constant currency. Our organic year-on-year 4:07 4 minutes, 7 seconds growth, excluding broadpath, was also strong at 25.8% in rupee terms and 19.4% 4:13 4 minutes, 13 seconds in constant currency terms, reflecting sustained demand across our payer and provider operations and continued expansion with existing clients. 4:23 4 minutes, 23 seconds On profitability, Q4 adjusted EITA was 5,36 million rupees or $55.2 million with margins of 24.9%. 4:34 4 minutes, 34 seconds Adjusted PAD for Q4 came at 33,69 million rupees or 33.6 million at margins of 15.2%. 4:44 4 minutes, 44 seconds Now looking at the full year, the full year revenues were 71,929 million rupees or $814 million up 29.1% year-on-year in 4:53 4 minutes, 53 seconds INR terms and 23.6% in constant currency. Organic growth excluding 4:59 4 minutes, 59 seconds broadpath was 20.1% in INR terms and 15% in constant currency. For the full year, 5:07 5 minutes, 7 seconds adjusted AITA stood at 18,200 million rupees or $26 million, translating to a 5:14 5 minutes, 14 seconds 25.3% margin and exceeding the guidance provided at the end of the Q at the end of Q3, underscoring our ability to scale while sustaining resilient margins. 5:26 5 minutes, 26 seconds The expected 110 bips margin decline versus FI25 primarily reflects the fullear impact of the broadpath acquisition. 5:34 5 minutes, 34 seconds Adjusted PAT rose to 11,36 million rupees or 127.9 million up 39.5% year-on-year with a 15.7% margin. 5:47 5 minutes, 47 seconds adjusted part margin expanded by 110 bips versus FI25 driven by strong IITA performance, higher forex gains and lower finance costs. 5:57 5 minutes, 57 seconds Commercially, Q4 was another very strong quarter. We signed $30.7 million of potential steadystate ACV supported by 6:05 6 minutes, 5 seconds expansions and new S so across 18 existing clients and two clients added in Q1 to Q3. 6:13 6 minutes, 13 seconds I'd also like to highlight the strong external validation we received during the quarter with multiple leader recognitions from Nelson Hall, Everest 6:21 6 minutes, 21 seconds Group and ISG and the augmented intelligence award for smart tech nurse assist which collectively reinforce a differentiated position in intelligent healthcare operations. 6:31 6 minutes, 31 seconds I'm also happy to announce that the board has recommended a final dividend of.1 rupees or 10 pes per share subject to approval of shareholders. 6:42 6 minutes, 42 seconds Next slide please. 6:46 6 minutes, 46 seconds In FI26, payers contributed 89.7% of revenues while providers contributed 10.3%. 6:54 6 minutes, 54 seconds The reduction in provider share reflects impact of the acquisition of Broadpath which had a predominantly payer focused revenue mix. 7:02 7 minutes, 2 seconds Employee strength stood at 6 46,860 as of the end of Q4 driven by headcount 7:09 7 minutes, 9 seconds reduction post OE season. The slight uptick in attrition in FI26 is attributed to higher seasonality compared to the previous year. 7:19 7 minutes, 19 seconds If you move to the next slide, so this slide summarizes all of the annual KPIs that we report every year. 7:26 7 minutes, 26 seconds Uh the notable point here is our top three concentration has fallen below 60%. 7:32 7 minutes, 32 seconds And the other key point is the number of clients contributing to over 20 million as you can see has grown to nine which 7:39 7 minutes, 39 seconds is four in FI23. So more than doubled uh since FI23. 7:46 7 minutes, 46 seconds If you move to the next slide, uh let me like always give you some of the recent market trends. 7:53 7 minutes, 53 seconds Uh CMS finalized the Medicare Advantage rate increases and as if you remember the same time when we announced the Q3 results, uh they had announced a a 8:01 8 minutes, 1 second preliminary almost flat uh rate for FI 20 for CY27. But now that stands 8:08 8 minutes, 8 seconds increased to 2.48%. 48%. So this gives a slightly more favorable environment for Medicare advantage plans. But having said that they are still under 8:16 8 minutes, 16 seconds tremendous cost pressures because of uh increased uh medical utilization. So what it means for agility is uh 8:22 8 minutes, 22 seconds proposals that focus on cost takeout in administrative functions and also helping improve star ratings are looked 8:31 8 minutes, 31 seconds upon very favorably by our MA plan clients. The second thing is the house bill to to extend or enhance the ACA 8:39 8 minutes, 39 seconds subsidies. Right? So so this was another thing we spoke about in the in the previous quarters. But uh with with this bill assuming it passes both houses uh 8:49 8 minutes, 49 seconds it uh gives a more stable uh market or or stable premium for uh membership in 8:56 8 minutes, 56 seconds the ACA marketplace and uh keeps the market at a steady level getting into FI27. However, as we've mentioned to you 9:05 9 minutes, 5 seconds before, our exposure to the ACA market is is limited, but it still underscores the importance of uh cost takeout and 9:12 9 minutes, 12 seconds and ALA initiatives in the in the ACA segment. The next one is on state Medicaid expan expansion. As you know, 9:21 9 minutes, 21 seconds uh the Medicaid segment has been impacted uh uh by uh the big beautiful bill as well and some of the incentives 9:29 9 minutes, 29 seconds for expansion at the state level has been uh eliminated. So uh there is likely to be a moderation uh in the in 9:36 9 minutes, 36 seconds the Medicaid growth. Again this is a segment that we've said we have very low exposure to but once again uh this is another uh pressure from a membership 9:45 9 minutes, 45 seconds and cost point of view which means some of these plans also have tremendous uh pressures to take out cost uh in their 9:52 9 minutes, 52 seconds in their functions. And lastly, uh CMS launched what's called access model which is advancing chronic care with 10:01 10 minutes, 1 second effective scalable solutions. What this means is uh CMS wants to incentivize outcome based chronic care management 10:08 10 minutes, 8 seconds with tech enabled care as central to the model. While this is uh specifically targeted at original Medicare, it closely aligns with what we've been 10:17 10 minutes, 17 seconds trying to help Medicare Advantage clients with, which is uh to use technology to do risk ratification and 10:23 10 minutes, 23 seconds enable care as well as uh tech enabled member support uh and member engagement activities. 10:33 10 minutes, 33 seconds Moving on to the next slide. This quarter we also launched a brand evolution. This is not just a cosmetic 10:41 10 minutes, 41 seconds change. It's a reflection of how we are going to market as a healthcare first tech and AI led operations partner on 10:48 10 minutes, 48 seconds outcomes. The brand promise is Saggility delivers value in healthcare operations with deep domain expertise technology 10:55 10 minutes, 55 seconds and AIEL transformation and trusted collaboration. So the this promise defines how saggility shows up for 11:03 11 minutes, 3 seconds client in an era where healthcare operations must fundamentally transform. 11:07 11 minutes, 7 seconds It rests on three core attributes. Deep domain expert expertise. We are a dedicated specialist in US healthcare 11:15 11 minutes, 15 seconds operations with more than 26 years of accumulated knowledge across end-to-end medical pharmacy and dental business 11:22 11 minutes, 22 seconds segments combining the depth of a niche expert with the breadth of a global enterprise. 11:28 11 minutes, 28 seconds The second pillar is tech and AI transformation. This is technology deployed to solve specific healthcare problems with compliance and clinical safety as non-negotiable guardrails. 11:40 11 minutes, 40 seconds Healthcare AI must be explainable, must be auditable and must be regulator ready. And the third and the most important pillar which is trusted 11:47 11 minutes, 47 seconds collaboration which is agility works sidebyside with clients building transparency and shared accountability into every engagement. The company's 11:56 11 minutes, 56 seconds emphasis on we listened, we acted, we delivered captures a discipline of incorporating client feedback directly into operational improvements. 12:06 12 minutes, 6 seconds This promise defines how agility delivers value. But to scale it across markets, buyers and deal cycles, it must 12:14 12 minutes, 14 seconds be consistently experienced, not just articulated. 12:20 12 minutes, 20 seconds Moving on to the next slide. We recently had our claim summit. We do this uh every uh year and we had over 80 client 12:29 12 minutes, 29 seconds attendees. The key takeaway from this event is the level of engagement and partnership we are seeing with our clients. We brought together senior 12:38 12 minutes, 38 seconds client leaders to collaborate on key industry challenges including medical cost pressures, member experience and the use use of AI in operations. 12:48 12 minutes, 48 seconds Through this process, we worked with clients to co-develop solutions and we are now moving into early pilots on selected initiatives. 12:57 12 minutes, 57 seconds This reinforces our approach of not just building solutions independently but building them in partnership with our clients. 13:05 13 minutes, 5 seconds With that, I'll hand it over to Amar to walk us through the financials and then I'll come back for closing comments. Over to you. 13:12 13 minutes, 12 seconds Thank you Romesh. Good evening everyone. 13:15 13 minutes, 15 seconds Uh I have recently joined Saggility as a group CFO and I must say that I'm truly excited to be here uh at a time when the company is delivering such strong results. 13:27 13 minutes, 27 seconds Uh next slide. 13:29 13 minutes, 29 seconds I'm pleased to present an overview of Saggility's financial results for the fourth quarter in the fiscal year 2026. 13:36 13 minutes, 36 seconds In quarter 4, Saggility delivered strong revenue growth and solid profitability. 13:41 13 minutes, 41 seconds This performance is supported by consistent underlying revenue momentum for the full year. FI26 performance came 13:49 13 minutes, 49 seconds in ahead of the guidance we have shared during our last earnings call driven by strong operating execution, disciplined cost management and a better than expected open enrollment season. 14:00 14 minutes I'll move to cash flow as Romesh has already given you a view of revenue adjusted EIA and adjusted PAD. Our operating cash flow conversion for the 14:08 14 minutes, 8 seconds quarter was healthy at 104.6%. 6% driven primarily by an improvement in working capital and lower tax outlook in this quarter as compared to quarter 3. 14:18 14 minutes, 18 seconds At quarter end DSO stood at 87 days comprising of 54 days of trade receivables and 33 days of unbuilt 14:25 14 minutes, 25 seconds revenue. While this is slightly higher than the 86 days reported in Kota 3, the increase is primarily due to an 14:32 14 minutes, 32 seconds accounting reclassification moving from build unbuilt to financial liabilities. This had an impact of 14:40 14 minutes, 40 seconds approximately 4 days. But importantly, this reclassification had no impact on working capital. 14:48 14 minutes, 48 seconds On this slide, I'll highlight the seasonality in our business uh with a stronger second half. As you would notice, our revenue sharply increases in 14:57 14 minutes, 57 seconds quarter 3 over quarter 2 and remains steady in quarter 4. This increase in quarter three and quarter four is largely on account of additional seasonal revenues from open enrollment 15:06 15 minutes, 6 seconds and a highlighted by Romesh earlier. We had around 50 million of recurring seasonal revenues in H2. You'll also 15:14 15 minutes, 14 seconds notice that our headcount has come down in this quarter as our open enrollment season concludes. 15:20 15 minutes, 20 seconds The adjusted for quarter 4 was 24.9%. 15:25 15 minutes, 25 seconds uh in this quarter we recorded a one-time employee bonus as part of our transition in our salary hike cycle from a calendar year basis to a financial 15:34 15 minutes, 34 seconds year basis. This one time item this one time item impacted the adjusted EIA by approximately 1.7% in quarter 4. 15:46 15 minutes, 46 seconds This slide highlights our robust growth trajectory and our steady margin profile. uh 3 years eager on revenue is 16.2% in constant currency terms. 15:57 15 minutes, 57 seconds Adjusted EIA grew by about 17.7%. 16:00 16 minutes And adjusted PAD expanded at a significantly faster pace of 31.7% over the last 3 years. These growth rates are 16:09 16 minutes, 9 seconds in dollar terms and includes the impact of acquisitions. 16:13 16 minutes, 13 seconds This strong bottom line outperformance was driven by three key pillars. 16:18 16 minutes, 18 seconds operational efficiencies, reducing finance cost and higher other income including forex. Overall, this reflects 16:25 16 minutes, 25 seconds our ability to consistently scale revenues while sustaining margins. 16:33 16 minutes, 33 seconds Moving to other financial indicators, our adjusted EPS continues to grow faster than revenues and our adjusted 16:39 16 minutes, 39 seconds ROC continues to be steady at greater than 50%. 16:44 16 minutes, 44 seconds Cash conversion in FI26 is lower compared to previous year and this is a result of higher tax outflow, lower non- 16:52 16 minutes, 52 seconds tax non-cash expenses and higher non-cash income. 16:57 16 minutes, 57 seconds Let me explain the few major factors here. In FI25, we had received tax refunds in India for previous periods which reduced the overall tax outflow for FI25. 17:07 17 minutes, 7 seconds Secondly, we also had a large SAR expense which is non-cash in nature and in FI26, we also had higher unrealized forex gains under our reported EIA. 17:20 17 minutes, 20 seconds Finally, on debt, we are on track to repay our current debt completely by end of FI27. 17:31 17 minutes, 31 seconds Uh this slide is a little busy but we'll give you an overview of our quarters uh performance compared to quarter 3 and quarter four of previous year and you 17:40 17 minutes, 40 seconds also have the full year numbers compared to previous year. 17:43 17 minutes, 43 seconds Uh just keep this on for a few seconds for you to observe the numbers. 17:53 17 minutes, 53 seconds Uh we can move on to the next slide. On this slide we present the adjustments to uh IBITA. Our adjustments on IBITA 18:01 18 minutes, 1 second include adjustment made for M&A own stock appreciation rights and other uh income and forex gains. 18:09 18 minutes, 9 seconds While our adjustments on adjusted PAT includes adjustments made for IBATA as well as adjustment made towards intangible amotization 18:17 18 minutes, 17 seconds and exceptional items that we have booked for this quarter for onetime impact coming out of the new labor code. 18:27 18 minutes, 27 seconds uh going forward uh this is a view of our debt repayment plan uh and earners and intangible amortization. 18:35 18 minutes, 35 seconds We give this every quarter. You the changes that you see for FI27 is mainly on account of forex changes. 18:46 18 minutes, 46 seconds Next slide on balance sheet. Our balance sheet continues to be very healthy and at the end of Q4 our cash position is uh 18:55 18 minutes, 55 seconds 9,38 million which enables us to continue to invest in AI capabilities and domain and also continue to explore 19:03 19 minutes, 3 seconds uh inorganic opportunities on cash flow. We have already talked on 19:12 19 minutes, 12 seconds a little bit on one of items in my earlier pres in the earlier in my presentation. Uh and going forward I think we are very confident of sustaining these healthy cash flows. 19:24 19 minutes, 24 seconds Uh with that I conclude my presentation. 19:26 19 minutes, 26 seconds Uh handing back to Romesh for his closing remarks. Thanks. Thanks Samar. 19:34 19 minutes, 34 seconds As the numbers have shown our FI26 performance was exceptional. 19:39 19 minutes, 39 seconds Like I said, the industry continues to evolve with cost and regulatory pressures and clients are looking to partner to partners who can collaborate 19:47 19 minutes, 47 seconds with them on their AI and techled transformation journey. Not just as advisers or implementers of technology, but someone who can take accountability for business outcomes. 19:58 19 minutes, 58 seconds Our domain expertise, our investment in tech and AI and our deep client relationships make us the right partner for our clients. 20:06 20 minutes, 6 seconds We are carrying the momentum of a great FI26 into FI27. 20:11 20 minutes, 11 seconds While deal timings may be a little unpredictable, we are confident of growing in the low double digits in constant currency for FI27. 20:20 20 minutes, 20 seconds Our guidance for adjusted AITA margin is between 24 and 25%. And if the FX stays in the in the current ranges, it's more 20:29 20 minutes, 29 seconds likely to track towards the upper end of this range. 20:33 20 minutes, 33 seconds With that uh happy to take questions and hand it over back to Sedat. 20:38 20 minutes, 38 seconds Thank you. Participants who wish to ask questions kindly click the raise hand icon at the bottom center of your screen. 20:47 20 minutes, 47 seconds We will wait for the questions to assemble. 20:56 20 minutes, 56 seconds I repeat, participants who wish to ask a question are requested to click the raise hand icon at the bottom center of your screen. 21:32 21 minutes, 32 seconds We take the first question from the line of Santo Balan. 21:56 21 minutes, 56 seconds We can't hear 22:21 22 minutes, 21 seconds Hello. Yes, please go ahead. 22:24 22 minutes, 24 seconds Yeah, congratulations for the good set of number. 22:28 22 minutes, 28 seconds I I just want to know will there be any impact due to the AI in the future revenue? 22:40 22 minutes, 40 seconds Yeah. So, so uh we uh discussed a lot about AI and its impact on the investor today, right? So, the the the broad 22:49 22 minutes, 49 seconds answer to your question is yes, AI uh we believe AI is uh something that's going to generate a lot of efficiency for our 22:57 22 minutes, 57 seconds clients. efficiency in the in the sense of increased productivity uh lowering cost both in their administrative functions and also 23:06 23 minutes, 6 seconds helping improve member and provider experience. So, so while uh the productivity gains will uh reduce some 23:15 23 minutes, 15 seconds part of our revenues, we believe that AI will also help us gain more market share as we look to implementing AI as part of 23:24 23 minutes, 24 seconds our overall transformation of our client operations and and take accountability for for business outcomes. So, so that's 23:31 23 minutes, 31 seconds uh broadly our our position on AI. We've uh I mean we've grown as as as we said 23:38 23 minutes, 38 seconds we've grown at 15% uh in constant currency organically and uh we still believe that uh we can continue to grow in double digits. 23:48 23 minutes, 48 seconds So how far we have adapt adapted to this AI in our company organization? 23:55 23 minutes, 55 seconds Yeah, we've discussed that in the previous quarters. We've invested heavily in in in taken AI. There are a number of use cases that we've piloted. 24:04 24 minutes, 4 seconds We are working with several clients on on some of these initiatives. But yes, we we have uh we have uh implemented a 24:11 24 minutes, 11 seconds number of use cases in in various parts of healthcare operations. So thank you. 24:20 24 minutes, 20 seconds Okay. Thank you sir. 24:25 24 minutes, 25 seconds Thank you. We take the next question from the line of 24:32 24 minutes, 32 seconds Rohit Torat from Access. Rohit, your line has been unmuted. 24:38 24 minutes, 38 seconds Yeah. Hi, thank you for the opportunity and congratulations on a good set of numbers. Uh my first question is uh 24:44 24 minutes, 44 seconds regarding capital allocation policy. You have mentioned that you plan to extinguish the red by end of FY27. also 24:53 24 minutes, 53 seconds you have also increased the cash and cash equivalence on your balance sheet by a significant uh amount in FY like at 25:02 25 minutes, 2 seconds the end of FI26 versus at the end of FI25. So are there any plans to increase uh dividend payments in uh FI27 25:11 25 minutes, 11 seconds or payout would remain in the same range as of now? 25:15 25 minutes, 15 seconds So let me uh let me answer the question and Emma can add to that. Uh that's a good question right. So, so uh the the 25:23 25 minutes, 23 seconds debt repayment is something that we had uh even previously spoken about and uh we plan to repay whatever is left in the 25:30 25 minutes, 30 seconds debt uh in FI27. So, so that's one outflow. Uh second is uh we want to keep 25:37 25 minutes, 37 seconds some funds for for uh M&A activities. As we've said in the past, uh we're constantly looking for uh opportunities 25:45 25 minutes, 45 seconds that will help uh improve our our capabilities both on the on the technology and transformational side as 25:52 25 minutes, 52 seconds well as give us access to to more clients. So any such opportunities uh we may be uh that that uh that are out 26:02 26 minutes, 2 seconds there, we want to take advantage of that opportunity and we want to keep some funds for for our M&A. Beyond that, yes. 26:09 26 minutes, 9 seconds uh as we will we will look at uh uh the dividend going forward and uh though there is no firm commitment at this 26:16 26 minutes, 16 seconds point in time we'll we'll take a look at uh what can be uh provided in the form of dividends 26:23 26 minutes, 23 seconds okay and on the M&A side uh are you looking at acquisitions uh to strengthen your uh provider business or you would 26:33 26 minutes, 33 seconds also look for any potential acquisition in payer segment as well if they help you expand your presence further among 26:41 26 minutes, 41 seconds uh mid-market clients like what would be the priority? 26:45 26 minutes, 45 seconds See, we are we are looking at acquisitions on both payers and providers, right? So, so obviously a number of things uh we we look at before 26:54 26 minutes, 54 seconds deciding if a candidate is is the right one for us at this point in time. I mean, we've discussed in the past the the areas that uh we focus on both in 27:03 27 minutes, 3 seconds payers and providers. So anything that can give us a deeper domain differentiation in any of those areas or anything that can give us a technology 27:12 27 minutes, 12 seconds capability in in those practice areas are the are the acquisitions that we're looking at. So that's from a from a capability point of view. Secondly, uh 27:21 27 minutes, 21 seconds any something like a broadpath which gives us access to a large set of clients is another uh kind of acquisition that we we would be 27:29 27 minutes, 29 seconds interested in. So those are the two broad types of acquisitions we'll do. 27:33 27 minutes, 33 seconds But uh we look for those kinds of acquisitions both in the payer and the provider sectors. 27:41 27 minutes, 41 seconds Yeah. Thank you. Thank you for answering my questions. 27:44 27 minutes, 44 seconds Thank you. Before we move to the next participants who request interested participants to kindly raise their 27:51 27 minutes, 51 seconds questions by clicking on the raise hand icon at the bottom center of your screen. We take to the uh next question from the line of Bedic Sar from Unifi. 28:01 28 minutes, 1 second Badik, your line has been unmuted. 28:12 28 minutes, 12 seconds Vic, your line has been unmuted. You may speak. 28:17 28 minutes, 17 seconds Sorry, I I didn't notice that. Romesh, hi, good evening and congrats on a fantastic year of execution overall. Uh my wishes to you and the entire team. 28:25 28 minutes, 25 seconds Couple of questions. uh we make note of the Q4 ACV number that you uh shared with us but uh could you help us with the cumulative ACV number also that 28:33 28 minutes, 33 seconds we're sitting with at the end of the year uh I'm given to understand that a significant part of your book that runs on an AR basis right I mean there's a 28:40 28 minutes, 40 seconds annuality like component built into that so if you could just help us out what that number is looking at and that multiplied into the pricing hike uh that 28:48 28 minutes, 48 seconds you guys just talked about uh you know what does it set us up for a base case revenue growth for FI27 heaven this is 28:56 28 minutes, 56 seconds without considering uh fresh organic opportunities that will open up for the rest of the year. So if you just help me with that part of the math please. 29:04 29 minutes, 4 seconds Yeah so Vic nice to hear from you. Uh good question right. So the math isn't as simple as uh just adding up the the 29:13 29 minutes, 13 seconds ACVS but uh but to answer that question if you go back we've reported ACV wins uh in in each of the quarters roughly in 29:21 29 minutes, 21 seconds in similar ranges in the in the 30s right? So, so if you add add them all up, it'll probably add to somewhere around 130 odd million. Uh, so these are 29:31 29 minutes, 31 seconds ACVS uh potential ACVS of the deals that we've closed both with existing and new clients. Obviously, the timing of of 29:39 29 minutes, 39 seconds revenue generation of those deals will vary. Uh, so one is the the the ramp cycles that some of the those deals go 29:46 29 minutes, 46 seconds through. So the initial months of revenue may be different from the steady state ACV values uh that we quote and 29:53 29 minutes, 53 seconds secondly also the the the part of the ACB would have been realized in FI26 itself. Right? So so the incremental 30:01 30 minutes, 1 second revenues in FI27 is is over and above what has already been registered in in FI26 and and the rest of the revenues 30:09 30 minutes, 9 seconds have to come from pipeline that gets converted in the in the first few quarters of of FI27. So, so it's that. 30:17 30 minutes, 17 seconds So, all of that is cumulative additions to that. We'll have to also factor in any volume adjustments, right? Volumes in in existing books of businesses could 30:26 30 minutes, 26 seconds grow, could reduce depending on membership changes and and other other changes that that are happening. Then there are other kinds of uh revenue 30:34 30 minutes, 34 seconds reductions that we've spoken about AI and automation related reductions that we've spoken about in the past. Then there's a geographic mix. If if the same 30:43 30 minutes, 43 seconds part of work moves from a higher revenue geography to a lower revenue geography, there is a reduction in revenue. So all of this math has to add up to to the 30:51 30 minutes, 51 seconds final revenues that uh we we kind of guide for FI27. Does that make sense? 30:58 30 minutes, 58 seconds Uh yeah. No, I I obviously understand the qualitative aspect of it. Uh Romesh, you know, if you could just slice it by just one factor, right? for instance you 31:06 31 minutes, 6 seconds know the 814 that we've reported this year in USD uh you know what's what's the annuality component of that uh uh so so a there is one annuality 31:14 31 minutes, 14 seconds component secondly you know of the 120 that we've won in ACVs obviously we've delivered a lot of that in 26 itself so I'm just trying to understand that you 31:21 31 minutes, 21 seconds know what's the basic run rate without organic accretion in 27 I mean in in other words I could just ask you you know what your guidance for 27 is which 31:29 31 minutes, 29 seconds I eventually will but I'm just trying to understand what the base has already prepared us for uh and uh I mean on on on top of that I mean that was my next 31:38 31 minutes, 38 seconds question on on top of that what does the pipeline look like so I I leave it to you Ramish whichever way you want to answer yeah yeah yeah yeah so so uh look the 31:46 31 minutes, 46 seconds 814 million there is a steady state component and there is a seasonal component right like we said about 6% of our revenues were seasonal and those 31:53 31 minutes, 53 seconds seasonal components will reoccur in in FI27 as well right so so so that's one way to split it so if I if I were to 32:02 32 minutes, 2 seconds simplify your your overall question and and if you ask me what is it that is locked going into FI27 I mean at least 32:09 32 minutes, 9 seconds look there are always surprises in terms of volumes right so so I can't say with certainty what it is but typically when you give when we give a a guidance about 32:18 32 minutes, 18 seconds uh I would say seven I mean if I better hazard a guess about seven 7 to 8% of of growth will 32:28 32 minutes, 28 seconds will already be factored in basis the previous wins and the rest of the growth has to come during the Got it. Got it. So, so which then 32:36 32 minutes, 36 seconds reminds me with the last part of the question, you know, what's what's the qualitative uh uh I mean sentiment you're witnessing in conversations today 32:44 32 minutes, 44 seconds uh in terms of how large your bid pipeline is? Uh if you could just give us a sense of you know how that's moved uh over the last couple of quarters uh 32:52 32 minutes, 52 seconds you know what what kind of growth rates are you building and just from conversations that you're having today. 32:56 32 minutes, 56 seconds Yeah. So, so typically look we we've been reporting only on the on the deal wins right but if you look at the pipeline uh roughly from a TCV 33:05 33 minutes, 5 seconds perspective we'll have a pipeline of of close to 570 575 million worth of pipeline right so these are all uh proposals that we've submitted to 33:14 33 minutes, 14 seconds clients and qualitatively if you if you look at if you if you were to ask me on on the on the quality of conversations uh we are now like I said getting into 33:23 33 minutes, 23 seconds more uh managed service deal kind conversations in which the the timing of the deals could like I said could be a 33:30 33 minutes, 30 seconds little unpredictable because these are larger conversations. These are more transformative conversations where uh you are committing to cost take out over 33:38 33 minutes, 38 seconds a over a number of years and also expanding the scope of of work by including both upstream downstream 33:45 33 minutes, 45 seconds processes. Right? So the discussions take a longer time but given the cost pressures that most of our clients are under there's a lot more interest in 33:53 33 minutes, 53 seconds engaging uh in those conversations. So, so, so there is uh we are very bullish on on the kind of conversations we are having except that some of these 34:02 34 minutes, 2 seconds conversations could take longer than a traditional RFP based uh effort-based deal. 34:10 34 minutes, 10 seconds Right. Got it. U last question Romesh. 34:12 34 minutes, 12 seconds Um so I mean given the industry itself is growing at 78% and you know we're growing double that rate and of course there's the lever of pricing in our our 34:20 34 minutes, 20 seconds own tech initiatives. uh would would a number closer than I mean less than last year's but higher than par which is about 17 18% in uh dollar growth rate be 34:30 34 minutes, 30 seconds a fair assumption for the coming year by my my guidance by was low double digits right so so I mean I I mean at this 34:38 34 minutes, 38 seconds point in time uh we are giving a number that we believe we can definitely meet and every quarter when we uh when we do 34:46 34 minutes, 46 seconds the earnings call we will we will kind of guide you if you see a upswing to those numbers Sure. And on the uh 34:53 34 minutes, 53 seconds margins, I mean FX was a tailwind, but assuming none of that comes through in FI27, uh 25 is a defendable number. 35:02 35 minutes, 2 seconds Yeah. 24 to 25 is what we are guiding and and if FX being the way it is uh we we we believe we can come closer to the upper end of that range. 35:12 35 minutes, 12 seconds Vic would request you to rejoin the queue as we have some participants. Thank you. 35:16 35 minutes, 16 seconds Thanks. Thanks Vic. We take the next question from the line of Rishi Junwala from Rishi your line is unmuted. 35:23 35 minutes, 23 seconds Thanks for the opportunity. Um so couple of questions from my side. So one on on margins just wanted to understand uh 35:30 35 minutes, 30 seconds firstly um uh did we mention initially there was a a change in the wage high quarter and it it played out in this 35:38 35 minutes, 38 seconds quarter and as a result the margins would have been higher uh what the that number would be and secondly just wanted 35:46 35 minutes, 46 seconds to understand given that we are ending the year at 25.3 we are looking at um 35:53 35 minutes, 53 seconds you know if if we if we were to assume that the currency remains at current levels we are looking at almost 7 8% depreciation 36:01 36 minutes, 1 second and uh still we are talking about uh margins not expanding beyond last year so what are the headwinds and tailwinds 36:10 36 minutes, 10 seconds uh to the margin assumptions uh that we are looking for FI27 Emma do you want to take that 36:20 36 minutes, 20 seconds sorry yeah uh one second just just let me So let let me give you a high level view 36:30 36 minutes, 30 seconds u see the the hype cycle I think we've discussed this in the past I don't know whether we 36:38 36 minutes, 38 seconds officially gave you the impact of that as you know when we started as agility India our fiscal uh matched the calendar 36:46 36 minutes, 46 seconds year it was Jan through December but when we became a public company we changed the fiscal through to April through March so the last uh hike cycle 36:54 36 minutes, 54 seconds was effective Jan 1 2025 but we didn't do a increment on Jan 1 2026 we're going 37:02 37 minutes, 2 seconds to make it effective April 1 2026 so to overcome those three months uh where uh we effectively didn't didn't give a a 37:10 37 minutes, 10 seconds hike uh this is the onetime bonus that MR was talking about and and and that's the the the one time call out that he's 37:17 37 minutes, 17 seconds making sorry and Yeah, the question on full year FI27. 37:28 37 minutes, 28 seconds Yeah, FI27 received, that's a that's a good good question, right? So, there are couple of things, right? One, uh 37:35 37 minutes, 35 seconds obviously look the the the forex depreciation uh the the the amount of depreciation is an unknown, right? But 37:42 37 minutes, 42 seconds the fact that rupee depreciation is is key for uh at least uh compensating for part of 37:50 37 minutes, 50 seconds the wage increases is is a is a known phenomena, right? So, so uh the hype that we'll give effective April 1, a part of that has to be absorbed by any 37:59 37 minutes, 59 seconds currency depreciation, right? Secondly, the geographic mix is also changing, right? So, so we are we are starting to 38:06 38 minutes, 6 seconds see more uh revenues delivered from from our US geography which also has an impact on the weighted average uh 38:14 38 minutes, 14 seconds margin, right? So, so, so those are the two uh big things and beyond that any uh sort of uh price uh differences, price 38:24 38 minutes, 24 seconds reductions and so on will also have an impact. Uh the positives is we continue to try and generate efficiency in our operations. The more technology we 38:31 38 minutes, 31 seconds deploy, we try and make sure that uh we we compensate for any uh cost commitments or cost reductions or price reductions that we give clients. So, so 38:40 38 minutes, 40 seconds that's one factor and and and secondly, yes, if the exchange depreciates by uh by more than what we need to compensate for heights and so on, it'll it'll 38:49 38 minutes, 49 seconds improve our margin. So, it's a sum total of all those functions. So, given where we are today and taking into account the mix and and all of these factors, we 38:56 38 minutes, 56 seconds think uh we will be in the 24 to 25% range. But if things change, we will definitely uh update our guidance. 39:04 39 minutes, 4 seconds Sorry, did you did you want to add to that? I I echo I mean basically we will get a upside from forex even at the current levels and if it continues to 39:13 39 minutes, 13 seconds sustain at these levels yes as we said we'll hit uh uh somewhere near the top end of our guidance and as Romesh also 39:21 39 minutes, 21 seconds pointed out uh this forex depreciation is what also allows us to uh compensate our employees with higher wages etc. Uh 39:31 39 minutes, 31 seconds so that's a lever for us to offset it in addition to the cost efficiencies that we generate internally. So yes, I mean if it sustains, we are confident of 39:40 39 minutes, 40 seconds hitting somewhere near the top end of our guidance. 39:43 39 minutes, 43 seconds Fair enough. And and just the second question, I see we have created an ESOP pool for 3.3% of equity. Um and a large 39:52 39 minutes, 52 seconds chunk of that is uh performancebased uh where the vesting period is 2 years. um 39:59 39 minutes, 59 seconds in your uh stock compensation schedule I do not see any material change for the next 2 to 3 years. So just wanted to 40:08 40 minutes, 8 seconds understand uh how would this uh uh you know ESOP vesting or granting will play out and um you know how do we see that 40:17 40 minutes, 17 seconds given that those will be you know large chunk of those will be at face value how will that uh you know hit the P&L over 40:23 40 minutes, 23 seconds the next two three years. So, so uh we we've just uh announced the scheme and it has to go out for shareholder 40:30 40 minutes, 30 seconds approval, Trishi. So, we'll give you a better view into those uh in the next earnings call. But, uh just to correct the the the grants are will be made 40:40 40 minutes, 40 seconds every year and the vesting is over a three-year uh period, right? Not two years. The exercise post 40:47 40 minutes, 47 seconds vesting the exercise period is two years, but the but the vesting itself is over 3 years. Uh yes. uh as as you 40:55 40 minutes, 55 seconds mentioned a large part of that will be performance based both at the company level and the individual level. Uh but 41:02 41 minutes, 2 seconds uh the the exact number of uh uh units to be granted in FI 27 and the impact of 41:09 41 minutes, 9 seconds that uh on the on the P&L is something that we'll come back to you in the next earnings call. 41:15 41 minutes, 15 seconds Understood. All right. Thank you so much. 41:19 41 minutes, 19 seconds Thank you Rishi. We take the next question from the line of Wami Krishna from Kota. I'm sure your line has been unmuted. 41:28 41 minutes, 28 seconds Hey. Hi. Uh uh actually uh really strong quarter. Uh Romesh. Congrats on that. Um 41:34 41 minutes, 34 seconds so uh just wanted to understand uh uh uh on the beat itself uh given that this there was almost $7 million beat uh in a 41:43 41 minutes, 43 seconds single quarter. Uh were there any one-off engagements uh uh which contributed to this uh or something which came up in a quarter? 41:53 41 minutes, 53 seconds Sorry I didn't get that question. Uh you talking about revenue enrichments or cost? 41:59 41 minutes, 59 seconds Yeah. So so so compared to your uh guidance of 22 and a half% uh you were at around 23.7% which is 7 million. 42:08 42 minutes, 8 seconds Yeah. 42:08 42 minutes, 8 seconds Okay. Yeah. So so like we said we had a better than expected Q3 and uh Q4 right. 42:14 42 minutes, 14 seconds So so typically our our uh seasonal revenues are roughly 3% of our uh annual revenues. this year they were more like 42:22 42 minutes, 22 seconds 6%. Part of it in Q3 we explained because broadpath's uh significant peak happens in in in in Q3 whereas uh on in 42:31 42 minutes, 31 seconds Q4 we had additional seasonal revenues on the agility side especially on the clinical side of the business right so which uh we had some uh visibility to 42:40 42 minutes, 40 seconds getting into Q4 but it was uh higher than than what we had anticipated so that explains the the difference between what we gave as guidance and what we 42:48 42 minutes, 48 seconds actually achieved. Yeah, just to add on to Romesh's point, we had guided to about five and a half% of our fullear revenues as surge revenues that has 42:56 42 minutes, 56 seconds moved to around 6% of full year revenues and that gave us a uplift in quarter 4. 43:02 43 minutes, 2 seconds Perfect. Understood that. And uh second uh is on your client pyramid itself now that you have uh uh more than doubled your clients in the $20 million bucket. 43:13 43 minutes, 13 seconds uh but still if I I see uh the client average client size in the 3 to 10 range it's uh around 27 million uh versus your 43:22 43 minutes, 22 seconds top three clients uh which are maybe more than more than four times of that number. So incrementally since you have 43:29 43 minutes, 29 seconds a uh uh reasonable set of clients uh where you have a uh minimum threshold of or say you must have proven your uh 43:38 43 minutes, 38 seconds expertise. So will your uh incremental efforts be focused more on mining these uh set of accounts or uh you will be looking to add more accounts? 43:50 43 minutes, 50 seconds Well in a way both right our traditional growth uh continues to come from existing clients right and as we keep 43:58 43 minutes, 58 seconds adding newer clients we may start with a with a smaller deal size but uh we have the confidence of of uh continuing to 44:07 44 minutes, 7 seconds grow those relationships. So to your point, a lot of these clients in the 5 to 20 million range uh or or just over 44:13 44 minutes, 13 seconds 20 million range uh are still uh clients where we see huge opportunity. I mean they may not go to the four times that 44:21 44 minutes, 21 seconds you that you are talking about of the top five but they definitely many of them have the potential to double or more than double right. So, so large 44:28 44 minutes, 28 seconds large part of our effort goes into into uh continuing to mine those relationships and trying to grow them uh 44:36 44 minutes, 36 seconds faster than the the top five and which is already shown in the results, right? 44:39 44 minutes, 39 seconds So, our top five grew at 11.9%. Whereas at a company level, we grew at 15%. So, some of these non-top grow much faster 44:48 44 minutes, 48 seconds than the top five. But equally important is we want to create more breadth in terms of our client portfolio. So we'll 44:56 44 minutes, 56 seconds continue to look for opportunities in the mid and small market space and a lot of the transformational solutions that we are talking about today we believe 45:03 45 minutes, 3 seconds has a lot of applicability in that segment where uh we can help them take out uh a large part of their costs. 45:12 45 minutes, 12 seconds Perfect. Uh and then my my last question is on the provider segment. Uh so the revenues here uh have actually 45:20 45 minutes, 20 seconds stabilized on absolute basis of last four quarters. uh uh can you just shed some light uh as to what's happening in this business and uh uh what's the 45:29 45 minutes, 29 seconds outlook and uh just one say AI impact uh uh uh will this be relatively higher compared to your payer business or how do you see that? 45:39 45 minutes, 39 seconds No, I we don't think uh AI impact will be significantly higher in provider versus payer. I mean I think uh like you 45:46 45 minutes, 46 seconds know large part of what we do is on the revenue cycle and uh I mean we we al we get both effort based as well as 45:55 45 minutes, 55 seconds contingency based pricing uh on the on the provider side and so we are in the process of uh using AI to improve the 46:04 46 minutes, 4 seconds efficiencies of a large part of what we do in the in the revenue cycle side. So, so, so we believe that uh that business will also grow and and and we'll take it 46:12 46 minutes, 12 seconds offline, but that business has grown in in in FI26 over 25. So, when you said stable, I'm not sure if you if you 46:19 46 minutes, 19 seconds implied it didn't grow, it did grow uh compared to FI25. But, uh we are looking at larger engagements even on the 46:26 46 minutes, 26 seconds provider side. So we we are in conversations at least on a couple of opportunities where uh we are uh 46:35 46 minutes, 35 seconds committing to uh to to give clients or prospects a significant cost uh takeout opportunity if you were to do uh pretty 46:44 46 minutes, 44 seconds much the end to end RCM for them. So so so so we are fully confident of of continuing to grow the provider business as well. 46:53 46 minutes, 53 seconds Perfect. No, I was just uh referring to uh 1Q to 4Q where it was 20 to $21 million but nonetheless point taken uh that it has grown on the YI basis. Uh those one questions. Thank you. 47:08 47 minutes, 8 seconds Thank you. We take the next question from the line of Cherak Kachardia from Motila Los. Your line has been unmuted Chira. 47:17 47 minutes, 17 seconds Yeah. Hello. I'm audible. Yes, please go ahead. 47:22 47 minutes, 22 seconds Yeah. So uh what was the annual wage hike uh during the year across different uh set of employees that is question 47:29 47 minutes, 29 seconds number one and second you mentioned you change the quarter of wage hike if I uh hear it properly then will this pattern 47:37 47 minutes, 37 seconds continue in FI27 as well and third what is effective taxes one can tax rate one can expect for FI27 yeah there's three 47:46 47 minutes, 46 seconds questions I think I'll answer the second will answer the the first and third so no once we we move into the April through March uh 47:54 47 minutes, 54 seconds increment cycle then it'll stabilize. So this is a one-time thing just for uh Q4 of FI26 48:02 48 minutes, 2 seconds a catch up but starting April it'll be uh regular uh increment cycles every April. 48:11 48 minutes, 11 seconds Uh yeah couple of other questions that you asked. Obviously the hike will depend on the different geographies 48:18 48 minutes, 18 seconds uh and you know obviously given the uh difference between the US versus India we give the normal hikes but this 48:27 48 minutes, 27 seconds particular one time was a uh quarterly one-time payout as we transition from a 48:34 48 minutes, 34 seconds calendar year to a full year uh basis from a tax perspective we expect broadly the same level of ETR to continue around 48:42 48 minutes, 42 seconds 24 to 25% % for both 25 and 26. Sorry, 26 and 27. 48:50 48 minutes, 50 seconds Thank you. Does that answer your question, Sher? 48:59 48 minutes, 59 seconds Uh, yes. Yeah. All right. Do you have other questions? 49:06 49 minutes, 6 seconds No, that's also Thank you. We move to the next caller. 49:10 49 minutes, 10 seconds The next question is from the line of Samir Paradikar from Ara Capital. Samir, your line has been unmuted. 49:24 49 minutes, 24 seconds Samir, your line has been unmuted. You may 49:38 49 minutes, 38 seconds please boy. Sam we not able to hear you. 49:53 49 minutes, 53 seconds Uh we move to the next participant uh and take the question from the line of Bhavik meta from JP Morgan while we 50:02 50 minutes, 2 seconds request Sami to rejoin. Bhavik your line has been unmuted. 50:08 50 minutes, 8 seconds Hi, thank you. Uh, so a couple of questions. Firstly, if I look at the revenue guide at low double digit versus 50:15 50 minutes, 15 seconds 15% organically, you did 26. So, is is this a conservative guide given how the macro is and you know, you might want to 50:22 50 minutes, 22 seconds wait and watch how the macro evolves before maybe increasing the guidance over the course of the year. That's the first question. 50:30 50 minutes, 30 seconds Yes, I mean, uh, like I said, we we're guiding today bases the the visibility we have. Like I said, some of the deals 50:37 50 minutes, 37 seconds uh while while they're different and and and uh more transformational, some of the timings of those deals could be a 50:45 50 minutes, 45 seconds little variable and that's why uh basis the visibility we have we are guiding to low double digits. But uh we'll have better visibility as we go through the 50:53 50 minutes, 53 seconds year and and uh uh bases that we will uh reguide uh on the on on on both the top line and the and the margin numbers. 51:05 51 minutes, 5 seconds Okay, got it. The second question is on margin again if I look at the band 24 to 25 midpoint and implies like a you know 51:14 51 minutes, 14 seconds decrease versus what you ended up doing in FI26. So I just wanted to understand what are the puts and takes or the headwinds you're building in for next year. 51:22 51 minutes, 22 seconds I think uh we covered that right so Emma do you want to uh restate some of the factors? Yeah. 51:28 51 minutes, 28 seconds Yeah. So first is I mean from an forex perspective we did say that if it persists at the current levels we are reasonably confident of hitting the top 51:36 51 minutes, 36 seconds end of our guidance. Two obviously you know there is that aspect of employee wage increases that we do give which is 51:43 51 minutes, 43 seconds funded from the effects that we get. Uh three we are also looking at a more onshore kind of a revenues. uh so even 51:53 51 minutes, 53 seconds if you see this year the share of our US revenues went up which is traditionally slightly uh low margins than our 52:00 52 minutes offshore business so uh all of this combined to ensure that you know we are right now in this 24 to25 52:08 52 minutes, 8 seconds and as I said if you're able to continue at this FX rates we should be at the top end of our guidance 52:16 52 minutes, 16 seconds which does definitely denotes a lower dilution than what you implance Okay, got it. Thank you. 52:26 52 minutes, 26 seconds Thank you. We move next to the line of Samir Parikar. Samir, your line has been unmuted. You may speak. 52:41 52 minutes, 41 seconds Yes, Samir, please go ahead. 52:46 52 minutes, 46 seconds It appears there is an issue at his line. I go to the line of Rishi Junjunwala for a followup. 52:55 52 minutes, 55 seconds Rishi, your line has been unmuted. Sorry, I I I don't have a followup. Thank you. 53:02 53 minutes, 2 seconds My apologies. Uh we move next to the question from Sedat Bora. 53:10 53 minutes, 10 seconds Your line has been unmuted. Yeah. Hi. Am I audible? Yes. Yes. 53:17 53 minutes, 17 seconds Yeah. Hi Ramish. uh Ramsh just a clarification from my end you're saying that increasingly there is more uh 53:25 53 minutes, 25 seconds revenues and the engagements are onsite so any change in nature or complexities what how is the overall deals evolving 53:34 53 minutes, 34 seconds at the same time if there is a shift to on-site there should be a natural lever to your growth rates uh versus a normal 53:42 53 minutes, 42 seconds year so how should we think about that while you are saying that your visibility currently uh is on the lower double digit side. 53:51 53 minutes, 51 seconds So yeah. So uh Sach when when we say uh onshore it's not onsite, right? So so I 53:59 53 minutes, 59 seconds mean unlike uh other businesses, we don't deploy people to client offices or client locations, right? So this is 54:07 54 minutes, 7 seconds delivering for a client from the US geography because uh of whatever restrictions the client may have or because of regulatory reasons that the 54:16 54 minutes, 16 seconds work cannot move offshore right so so that's the kind of business uh for example broadpath uh most of broadpath 54:24 54 minutes, 24 seconds delivery is onshore right while our attempt is to move any new business that we get there to offshore like I said depending on regulatory reasons or 54:33 54 minutes, 33 seconds client preferences some of the work may have to be done onshore Similarly on payment integrity some part of our delivery happens onshore. So so 54:41 54 minutes, 41 seconds growth in in those businesses will will have a larger onshore component uh compared to offshore. Having said that 54:49 54 minutes, 49 seconds uh like I've explained in the past things do tend to move from onshore to offshore as well right? So so so while some of the newer clients may want to 54:57 54 minutes, 57 seconds start onshore over a period of time they may also pro they may also be open to moving that work offshore. But at this 55:04 55 minutes, 4 seconds point in time if you if you look at some of the opportunities in the pipeline and where the growth is going to come from the rate of growth may be slightly higher uh in in onshore geographies 55:14 55 minutes, 14 seconds compared to our offshore geographies. So so that's uh that that was the comment around margins. Uh 55:22 55 minutes, 22 seconds but uh to your other point yeah like I said uh we will we will revise the guidance as we go along depending on on the visibility that we have. 55:32 55 minutes, 32 seconds Uh just a followup to that uh given the complexities and maybe more hiring nearshore if not yeah onsite 55:41 55 minutes, 41 seconds is how has the historical revenue share or the headcount share been on site uh nearshore and in India or in offshore 55:49 55 minutes, 49 seconds locations and do you see that changing going forward with uh advent of AI or things uh the way they are changing going forward? 55:58 55 minutes, 58 seconds No, right for for like I said for clients who've already worked with us or who are used to the to the outsourcing 56:06 56 minutes, 6 seconds model uh given the cost pressures that they are under if a work can be delivered in a in a lower cost geography they would prefer that right so so it's 56:15 56 minutes, 15 seconds not a question of uh there is a shift in perception uh or or there's a shift in work from from offshore to onshore right 56:23 56 minutes, 23 seconds so I'm not saying that but as we get newer clients in the mid-market phase the newer clients may want who are not 56:31 56 minutes, 31 seconds accustomed to the to the offshore model they may want to start more onshore right and there are other kinds of businesses like like Medicaid and others 56:39 56 minutes, 39 seconds where the onshore component because of regulatory reasons could be higher than the offshore component so th those are the main reasons it's not that existing 56:46 56 minutes, 46 seconds clients are moving work from offshore to onshore because given the the pricing pressures today if existing clients can 56:53 56 minutes, 53 seconds move more work from their in-house uh to uh partners like us they would rather do it offshore than than onshore. 57:03 57 minutes, 3 seconds So you'll say your head counts and revenue ratios between on-site offshore will remain in line with your historical trends 57:12 57 minutes, 12 seconds with the with with the revenue mix slightly increasing towards onshore. 57:16 57 minutes, 16 seconds That's what Em was saying or one of the the the the saying in terms of 3 years kind of a scenario structurally how we look at 57:24 57 minutes, 24 seconds business nothing significantly different yes nothing different yeah sure got that's it from mine thank you sir 57:32 57 minutes, 32 seconds thank you thank you we go to the line of Samir Paradikar from Capital 57:40 57 minutes, 40 seconds Samir your line has been unmuted I don't think it's working. 57:51 57 minutes, 51 seconds Yes. Am I audible now? Yes. Yes. Please go ahead. Yeah. Sorry for that. 57:59 57 minutes, 59 seconds Sir, my question is basically uh on growth. Uh if I hear it correctly, uh we 58:06 58 minutes, 6 seconds are the the growth for us. Last year organic was I know 15 odd% and we are 58:13 58 minutes, 13 seconds guiding for a lower double growth on a at a consolidated level that means possibly organic growth could be even lower than that. So uh despite such a 58:21 58 minutes, 21 seconds strong numbers coming in uh any reason for some lower growth for this year is it because of the AI compression which you talked about in the earlier call 58:30 58 minutes, 30 seconds about 1 or 2% going to a little higher to 3 to 4%. Is it impact of the some AI compression we are looking at or or what is the reason for it? 58:39 58 minutes, 39 seconds So, so first let me clarify right as we get into FI27 everything is organic right the last acquisition we did was in January of 2025. 58:49 58 minutes, 49 seconds So, so in FI27 there is organic unless we do any new acquisitions. So the guidance of low double digits that we 58:57 58 minutes, 57 seconds are giving is for organic growth. So any inorganic uh components that we add during the year will be over on top of 59:03 59 minutes, 3 seconds that guidance. Right? So so I hope that is clear right. So it's not that uh I'm giving an overall growth number and the organic number is going to be lower. 59:12 59 minutes, 12 seconds Uh the guidance is for organic growth. Yeah. 59:16 59 minutes, 16 seconds Uh yeah. So my question was basically the do we see some compression because 59:23 59 minutes, 23 seconds of AI and because of the compression is historically been there and and like I've said right. So, so for example, the 59:30 59 minutes, 30 seconds the compression is going to be slightly higher than than last year, right? So we've traditionally said it's about 1 to 1 and a half% but uh we are predicting 59:38 59 minutes, 38 seconds the compression to be more like 2% uh in in FI27 not significantly higher but uh but definitely higher than the past and 59:45 59 minutes, 45 seconds those numbers will will gradually uh inch up is is is the belief that we have and and and uh we'll see how it plays 59:52 59 minutes, 52 seconds out right but uh every I mean even historically whatever numbers we've grown at it is net of all of those uh uh 1:00:00 1 hour compressions because of not just uh technology or AI but also like I said in our business there is geography shifts so when work shifts from a from a higher 1:00:09 1 hour, 9 seconds revenue geography to a lower revenue geography there is revenue compression right so so there are a lot of and volume changes and so on so there are a 1:00:16 1 hour, 16 seconds lot of uh reasons why there could be revenue compression but purely if you look at technology like I said uh it it's been historically at at the 1 one 1:00:24 1 hour, 24 seconds and a half% level but we think it'll be more like a a 2% plus uh this 1:00:34 1 hour, 34 seconds And second part is uh when you we have a unusually higher attrition for the quarter uh we typically have a 1:00:43 1 hour, 43 seconds moderation of this quarter from quarter 4 to sub subsequent quarters uh any so I did not get that why the attrition was a 1:00:50 1 hour, 50 seconds little higher this quarter versus the historical numbers it's the same reason why we also said we we have a better uh actual revenue than 1:01:00 1 hour, 1 minute what we guided, right? So, so we said we had higher seasonal revenue in Q4 than what we anticipated and so that higher seasonal revenue, the fact that seasonal 1:01:08 1 hour, 1 minute, 8 seconds once that revenue goes away, the corresponding headcount also goes away, right? So, the the higher attrition in Q4 was a result of the higher seasonality in Q4. 1:01:18 1 hour, 1 minute, 18 seconds Okay. And and we have observed unusual uh the higher other expenses were very high in FI26. 1:01:26 1 hour, 1 minute, 26 seconds So any uh maybe highlight for that number inching up in FI26 you want to take 1:01:33 1 hour, 1 minute, 33 seconds yeah uh a lot of it is account of higher IT cost and uh you know investment that 1:01:40 1 hour, 1 minute, 40 seconds we did in IT from a uh AI and transformation kind of a perspective. 1:01:47 1 hour, 1 minute, 47 seconds uh we also have uh rationalized some of our centers in uh you know couple of our geographies which has led to a little 1:01:54 1 hour, 1 minute, 54 seconds bit of write off of assets. So those two would have contributed to a little bit higher cost. 1:02:00 1 hour, 2 minutes The first one being the more primary reason. 1:02:02 1 hour, 2 minutes, 2 seconds So we do expect this number to little moderate in uh next year. 1:02:07 1 hour, 2 minutes, 7 seconds We'll continue to do our investments in AI and transformation as I said. So uh we would expect that number to be continued to be re reasonably high. 1:02:17 1 hour, 2 minutes, 17 seconds Okay. Sure. Thank you so much. 1:02:20 1 hour, 2 minutes, 20 seconds Thank you. We move to the next question from the line of Bamshi Krishna of Kota. Your line has been unmuted. 1:02:27 1 hour, 2 minutes, 27 seconds Hi. Uh thanks for the followup. Uh so Romesh so just uh uh uh since you said there were uh higher than uh expected 1:02:35 1 hour, 2 minutes, 35 seconds quart uh seasonal revenues uh during this quarter as well as uh last quarter. 1:02:40 1 hour, 2 minutes, 40 seconds So how do you how should we think about the uh water seasonality that will play out in uh 1 cube? So they expect slightly steeper uh fam. 1:02:53 1 hour, 2 minutes, 53 seconds So broadly Wangshi like I said while it's seasonal we expect this seasonality to to occur every year right. So because 1:03:02 1 hour, 3 minutes, 2 seconds of the broadpath acquisition and also some of the more seasonal work that we've got what traditionally used to be more like a 53 47 Q H2 to H1 split is 1:03:11 1 hour, 3 minutes, 11 seconds becoming more like a 54 and a half 55% to 45%. Right. So and I think that's the way we think it'll it'll continue into the future as well. 1:03:21 1 hour, 3 minutes, 21 seconds Perfect. That answers my question. Thank you. 1:03:26 1 hour, 3 minutes, 26 seconds Thank you. Uh that concludes the webinar for today. 1:03:30 1 hour, 3 minutes, 30 seconds Thank you members of the management. On behalf of Sgility Limited, uh we would like to request all of the participants to log off now. Thank you. 1:03:41 1 hour, 3 minutes, 41 seconds Thank